Apollo Group and other for-profit colleges will find it harder to make the grade -- especially as they come under scrutiny for aggressive enrollment practices.

THE FOR-PROFIT COLLEGE BUSINESS grew sensationally right through the recession. September-quarter enrollments rose 20% to 50% across the industry, from little Grand Canyon Education (ticker: LOPE) to giant Apollo Group (APOL), parent of the well-advertised University of Phoenix. So why are the industry's stocks trading at historically low multiples of their fast-rising profits? And why did an Education Department panel spend last week discussing regulation of these businesses -- which enrolled more than 10% of all U.S. college students last year while accounting for almost 25% of $60 billion in government-backed...